Key Characteristics of Samsung Group (Essay Sample)

Samsung Group Report
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Executive Summary
Samsung Group is among the top four conglomerates in the world. This paper analyzes the essential characteristics of the group that has contributed to its success. The paper also examines the activities, goals and environmental influences of the principal subsidiaries of the group. There are organizational structures that fit Samsung Group. In this paper, I have analyzed two of such designs in relation to desired outcomes of the group. This paper also covers theories of organizational change, resistance to change, and influence of change on culture of Sony and its parent company, Samsung. I have recommended the use of matrix organization structure for the organization because of the many projects taking place.
Key characteristics of Samsung Group
Samsung Group, which is globally among the leading technology firms, has distinct features that have contributed to its success. It produces the variety of products ranging from consumer electronics, telecommunication equipment, ships, and medical equipment. It also offers services like construction, entertainment, advertising, communication and technology services, and hospitality. Samsung Group has continued to globalize its activities over the years and thus there has been a steady increase in its income especially from electronics devices like LCD televisions and mobile phones. (Samsung Group, 2013) In 2014, Samsung was the leader worldwide in Smartphone market share, a trend that has been there since 2011.
Samsung Group has many subsidiaries distributed all over the world. All these subsidiaries work independently of one another but are united under the Samsung brand. As of 2011, the organization had 59 branches that were not listed and 19 listed ones. All these companies had their primary listing on the Korea Exchange. The principal subsidiaries include Samsung Electronics, Samsung Heavy Industries, Samsung Engineering, and Samsung C&T. Samsung Electronics is the largest information technology company in the world in terms of Revenue. In terms of market value, it is 4th. It contributes an average of 70% of the group’s total revenue. Samsung Heavy Industries is the second largest shipbuilder in the world. (Samsung Group, 2013)
Just like any other firm in competitive market environment, Samsung Group’s products face competition from other companies producing similar products. Samsung Electronics faces stiff competition from other technology giants in the world like Nokia, Apple, HP, Intel, and others. Despite presence of competition, Samsung has managed to remain at the top of technology products’ market. (Hemmert, 2012) This is attributed to the group’s ability to produce the electronics at a lower cost compared to the competitors. Another reason for being at the top is its focus on acquiring the best personnel to work in its subsidiaries.
Samsung offers sponsorship to competitions, sports people, and sports clubs, around the world. This serves to better sports in the world and as a corporate social responsibility to boost the group’s global image. (Hemmert, 2012)The notable competitions being sponsored include Olympic Games, Paralympics, Africa Cup of Nations and Korea National League. Samsung also sponsors the Barclays Premier League Chelsea.
The market for the organization comprises of individual consumers and other companies. Samsung produces electronic products like chips, hard drives, and semiconductors for other businesses like Apple and Nokia. For individual consumers, the company has mobile phones, smart phones, and tablet computers. (Samsung Electronics, 2010)
Activities of Samsung Group
Different activities are conducted in the various subsidiaries of the organization. These activities are well coordinated because of the qualified personnel recruited by the organization. The main activity that is common among the subsidiaries is manufacturing. There are other activities that the group is involved with. Among them are marketing, research, employees training and development and software development.
Manufacturing of takes place in most of the subsidiaries depending on the type of products produced. For example in Samsung Heavy Industries situated in and outside of Korea deals with manufacturing of drilling ships, offshore vessels, large container ships, shuttle tankers, and special purpose vessels. Samsung Electronics is also involved with manufacturing of a number of products of which main ones include LCD panels, televisions, semiconductors and mobile phones. (Samsung Electronics, 2010) Although manufacturing takes place in South Korea and neighboring states, assembling of the parts is done in individual countries where the products are consumed. The main reason for success of Samsung’s products is its prowess in producing high-quality goods with low production cost. This has enabled the organization to offer these high-quality products to the market at affordable prices for the consumers. The low cost of production is associated with its location of production plants in Korea and other Eastern countries. (Lee, 2009)
Marketing of the group’s products is one of the most critical activities of the organization. The company uses strategic methods of marketing that has enabled it to become one of the leading technologies and ship manufacturing firms in the world today. The reason the organization focuses on hiring top quality personnel is especially to help in promotion and marketing of its products. The marketing team uses their various skills to identify target groups and to devise different promotional methods for the various target groups. Samsung uses multiple platforms of advertisement and promotion. The methods used are both direct and indirect. Samsung advertises directly through the televisions, the internet, and print media like newspapers and technology magazines.
Indirectly the organization invites potential customers in their stores to try out the different products. Another way the company markets its brand is through sponsoring sports teams and competitions around the world. For example, Chelsea Football Club in English Premier League is sponsored by Samsung. Thus, the organization logo is printed in the club’s playing kit. English Premier League is the most watched league in the world, and for this reason it markets Samsung’s brand to many viewers around the globe. This has seen the organization overtake Apple in the Smartphone market share (Samsung Group, 2013) Samsung carries out research and development in its technology apartment. Research and development is one of the core activities of Samsung Group. This is because it enables come up with inventions that are necessary for marketing and software development. Without this, it could not have reached where it is now. Ever since the creation of its two Institutes of Research and Development (R&D), the company’s quality of electronics improved. It also managed to diversify its products and enter into genetic engineering, optical telecommunications, high polymer chemicals and advanced network architectures. In the recent past, the technology department has shifted focus to software development. (Samsung Group, 2010) This is due to the changes in the market trends. The technology market demand smart and fast interfaces in every gadget. As a result, to succeed in the international market full of competition the department has to find ways of developing new and user-friendly products.
The organization also carries out training and development of new and existing employees. This is done to ensure employee satisfaction at workplace and also to facilitate required output from the employees. Newly recruited ones undergo training at Samsung group for three weeks and another one at particular business unit for eight weeks. Foreign employees are trained for one year. Their training that involves language and culture takes place in the countries in which they will work. The organization also has MBA training program in both domestic and foreign. (Samsung Group, 2010) The objective of this program is to develop future leaders of the organization. There is also leadership program that takes place at various levels of the organizational hierarchy. This program aims arming personnel with skills to help them in discharging their duties efficiently and thus contribute to realizing the goals of the organization.
Goals of the Organization
In the year 2009, Samsung came up with its ambitious ‘Vision 2020’ which set the objectives of the organization. Then goals of the company are to focus on innovation, create the best workplace, and to become the leader in creating new markets and to attract the industry’s best talents. All of this is summarized in the slogan “Inspire the world, Create the Future” (Samsung Group, 2013)
Focusing on innovation, the organization aims at securing the best minds in the world to come up with unique innovations that will lift it above its rivals. As we have seen earlier, the organization hires quality personnel who then undergo trainings and development that equips them with skills necessary for performing their duties. They help the organization achieve other goals like creating new markets for its products.
Another goal of the organization is to attract best talents in the technology industry. In helping this, it provides attractive compensation package for its employees. Also, it aims to ensure that the workplace is comfortable for every employee of the organization. The company believes that happy employees produce more output.
Environmental influences on the organizati...